Directors Report of Sri Nachammai Cotton Mills Ltd.

Mar 31, 2024

The Board of Directors of your Company is pleased to present the 44^th Annual Report on the business of the Company along with summary of financial statements for the year ended 31st March, 2024. The report is prepared in accordance with the provisions of the Companies Act, 2013.

Financial Highlights

During the year under review, performance of your company is as under:

Particulars	31.03.24 (Rs.in Lakhs)	31.03.23 (Rs.in Lakhs)
Profit /(Loss) before Finance Costs and Depreciation	-139.39	15.51
Finance costs	346.63	406.91
Depreciation	115.28	141.88
Profit /(Loss) before taxation	(601.30)	(533.28)
Less:Current tax (MAT)	-	-
MAT Credit Entitlement	-	-
Excess Income Tax Provision Reversed	0	5.61
Deferred Tax	122.33	195.05
Profit /(Loss) after tax	(478.97)	(332.62)
Add:Other comprehensive income
Remeasurement of post-employment benefit obligations	4.12	(4.18)
Gain on fair value of investments	3.97	0.46
Income tax relating to these items	(1.48)	1.04
Total other comprehensive income for the year	6.61	(2.68)
Total comprehensive (Loss) / income for the year	(472.36)	(335.30)
Earnings per share basic / diluted	(11.17)	(7.76)

Dividend

The Company is unable to declare any Dividend due to inadequacy of profits.

Review of Operations

During the year, the company has made a turnover of Rs.6635.93 (in lakhs) as against Rs. 11721.04 (in lakhs) in the

previous year. The Company''s Loss is Rs.472.36 Lakhs during the current year as compared to Loss of Rs.335.30 Lakhs

last year.

Management''s Discussion and Analysis

As per the Regulation 34(1) (e) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the

report on "Management Discussion and Analysis" forms an integral part of Annual Report as Annexure-I

Deposits

Company has not accepted any deposits from public.

Directors and Key Managerial Personnel

I. Pursuant to the provisions of Section 152 of the Companies Act, 2013 Smt.C.Renuka (DIN: 02209915) retire by rotation and being eligible offers herself for reappointment and the resolution is placed before the shareholders for approval. A brief resume, expertise, shareholding in the company and details of other entities in which the director is interested as stipulated under Regulation 36(3)(a) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and as per Secretarial Standard is provided in the notice attached.

II. All the Directors of the Company have confirmed that they are not disqualified from being appointed as directors in terms of Section 184(1) and Rule 9(1) of the Companies Act, 2013.

III. Pursuant to Regulation 34(3) and Schedule V para Clause (10)(i) of SEBI( Listing Obligation and Disclosure Requirements) Regulations, 2015 Certificate of Non Disqualification of Directors is received from the Practicing Company Secretary CS M.R.L Narasimha is attached as Annexure-VI Declaration by Independent Directors

The Company has received necessary declaration from each independent director under Section 149(7) of the Companies Act, 2013, that he/she meets the criteria of independence laid down in Section 149(6) of the Companies Act, 2013 and Regulation 25 of SEBI LODR.

During the year, the independent Directors were present in meeting of Independent Directors. The Independent Directors assessed the quality, quantity and timeliness of flow of information between the management and the Board and expressed that the Current flow of information and contents were adequate for the Board to effectively perform its duties.

Familiarization Programmes

The Company had conducted various sessions during the financial year to familiarize all the Directors including the Independent Directors with the updates of Company, their rules, responsibilities in the Company, and the technology and the risk management systems of the Company. Further, the Directors are encouraged to attend the training programmes being organized by various regulators/ bodies/institutions on above matters.

Number of Board Meetings and Committee Meetings

• The Board meets four (4) times during the financial year on 22^nd May 2023, 10^th August 2023, 09^th November 2023, 08^th February 2024.

• The Audit Committee meets four (4) times during the financial year on 22^nd May 2023, 10^th August 2023, 09^th November 2023, 08^th February 2024.

• The Stakeholders Relationship Committee meets four (4) times during the financial year on 22^nd May 2023, 10^th August 2023, 09^th November 2023, 08^th February 2024.

• The Share Transfer Committee meets six (6) times during the financial year on 22^nd April 2023,12^th June 2023,14^thJuly 2023,04^thSeptember 2023,12^th September 2023.

• The Nomination and Remuneration Committee met one (1) time during the financial year on 22^nd May 2023.

• The Independent Directors met one (1) time for Independent Director Meeting during the financial year on 08^th February 2024.

Statutory Auditors

The Company''s Auditors, M/s. Gopalaiyer and Subramanian., Chartered Accountants, Coimbatore, hold office for a term of five years (5) commencing from the financial year 2022-2027 till the conclusion of the 47^th Annual General Meeting.

The Auditors'' Report for the year 2023-2024 does not contain any qualification, reservation or adverse remark. The auditors'' report is enclosed with the financial statements in the Annual Report.

Secretarial Auditor

As required under Section 204 of the Act, and Rules made there under CS M.R.L. Narasimha, Practising Company Secretary was appointed to conduct the Secretarial Audit of the Company for the financial year 2023-2024. The Secretarial Audit Report for the financial year 2023-2024 forms part of the Annual Report as Annexure-VII to the Board''s Report.

Cost Auditor

Section 148 of the Companies Act, 2013 pertaining to audit of Cost Records is applicable to the Company. Based on the recommendation of the Audit Committee, CMA B.Venkateswar, Cost Accountant was appointed as Cost Auditor of the Company for the financial year 2024-2025 and the remuneration payable to Cost Auditor is placed before the Shareholders for ratification.

Internal Auditor

The Company has re-appointed CA H. Venugopal as the Internal Auditor of the Company for a further period of one year for the financial year 2024-2025. The scope of work includes review of process for safeguarding the assets of the Company, review of operational efficiency, effectiveness of system and processes and assessing the strength and weaknesses of internal control. Internal Auditor reports are placed before the Audit Committee on a regular basis for taking suitable action for improvement, wherever required.

Subsidiaries, Joint Ventures and Associates

The Company does not have any Subsidiary, Joint venture or Associate Company.

Corporate Social Responsibility

Corporate Social Responsibility is not presently applicable as the Company does not satisfy the conditions laid down in Sec.135 with regard to net worth, turnover and net profit.

Material Changes and Commitments

There have been no material changes and commitments between the end of financial year (March 31, 2024) and the date of the report affecting the financial position of the Company.

Adequacy of Internal Financial Controls and Internal Control System

The Company has in place adequacy internal financial controls with reference to financial statements. During the year under review, such controls were tested and no reportable material weakness in the design or operation was observed.

Company has established adequate Internal Control procedures, commensurate with the nature of its business and size of its operations and for ensuring the orderly and efficient conduct of its business for safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information. No fraud was reported during the financial year.

The Company has appointed Internal Auditor to observe the Internal controls, whether the work flow of organization is being done through the approved policies of the Company. In every quarter during the approval of financial statements, Internal Auditors will present the Internal Audit Report and Management Comments on the Internal Audit observation.

Particulars of Loan, Guarantees and Investments under Section 186 - Details of Loan
Sl. No	Period of making Loan	Details of Lender	Amount in Rs.	Purpose for which the loan is to be utilized by the recipient	Time period for which it is given	Date of BR	Rate of interest
1.	01.04.2023 to 31.03.2024	Supreme Yarn Spinners Pvt Ltd Door No.181, ''VASANTHAM'', 4th Cross Street, New Fairlands, Salem 636 016	15,82,51,000	Inter Corporate Loan	Repayable on Demand	22.05.2023 10.08.2023 09.11.2023 08.02.2024	5.75%
2.	01.04.2023 to 31.03.2024	Raja Yarn Private Ltd Door No.181, ''VASANTHAM'', 4th Cross Street, New Fairlands, Salem 636 016	11,33,89,500	Inter Corporate Loan	Repayable on Demand	22.05.2023 10.08.2023 09.11.2023 08.02.2024	3.00%

Investment made under Section 186 of the Companies Act, 2013

Investment made by the Company is within the limits specified under Section 186 of the Companies Act, 2013. Significant & Material orders

No Significant and Materials orders have been passed by any Regulator or Court or Tribunal which can have an impact on the going concern status and the Company''s operations in future.

Disclosure as required under Section 22 of Sexual Harassment of Workmen at Workplace (Prevention, Prohibition and Redressal) Act, 2013

As per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, the Company has constituted an Internal Complaints Committee. During the Financial Year 2023-2024 no compliant was received before the committee.

Conservation of Energy, Technology Absorption, Exports and Foreign Exchange earnings and outgo.

The information on Conservation of Energy, Technology Absorption and Foreign Exchange earnings and outgo stipulated under Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules 2014 is annexed herewith as Annexure - II

Corporate Governance

As per the new Regulation 27(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Corporate Governance Report, together with the Certificate from the Company''s Auditors confirming the compliance of conditions on Corporate Governance is given in Annexure-III

Copy of Annual Return

As per the requirements of Section 92(3) and Rule 12(1) of the Companies (Management and Administration) Rules, 2014 (as amended), the copy of the Annual Return in the prescribed Form MGT-7 for the financial year ended March 31, 2024 is placed on the company''s website www.sncmindia.com.

Contracts or Arrangements with Related Parties

Transactions entered with related parties have been explained in Form AOC - 2 -Annexure - IV annexed with this report and forms part of this Report. Further, policy on dealing with Related Party transactions has been uploaded on the Company''s website http.www.sncmindia.com.

Vigil Mechanism/Whistle Blower Policy

In pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013, a Vigil Mechanism for Directors and employees to report genuine concerns has been established.

The Vigil Mechanism Policy has been uploaded on the website of the Company at http.www.sncmindia.com. The main objective of this policy is to ensure sustainable business growth with stability and to promote a pro-active approach in reporting, evaluating and resolving risks associated with the business. In order to achieve the key objective, the policy establishes a structure and disciplined approach to risk management, in order to guide decisions on risk related issues.

Audit Committee

Audit Committee is in existence in accordance with the provisions of Section 177 of the Companies Act, 2013. The details relating to the composition, meetings, and functions of the Committee are given in Corporate Governance Report. The Board has accepted recommendations of Audit Committee, hence no disclosure required under Section 177(8) of the Companies Act, 2013.

Risk Management Policy

As per the Regulation 27(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Board members were informed about risk assessment and minimization procedures after which the Board formally adopted steps for framing, implementing and monitoring the risk management plan for the company. All the results and evaluation has been communicated.

Board Evaluation

The Board of Directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.

The performance of the board was evaluated by the board after seeking inputs from all the directors on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc. as provided by the guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017

The performance of the committees was evaluated by the board after seeking inputs from the committee members on the basis of criteria such as the Composition of committees, effectiveness of committee meetings, etc.

The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as contribution of the individual director to the board and committee meetings like preparation on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

Nomination and Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed the policy on director''s appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters as required under sub-section (3) of Section 178 of the Companies Act, 2013 which have been outlined in Nomination & Remuneration policy forming part of this Report.

The details of Remuneration to Directors are given in Annexure-V

Directors Responsibility Statement

In accordance with the provisions of Section 134(5) of the Companies Act, 2013, your directors confirm that:

(a) in the preparation of the annual accounts, the applicable accounting standards has been followed along with proper explanation relating to material departures;

(b) the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively;

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Particulars of Employees

The disclosure referred to the Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 does not apply to the Company as there were no employees who are in receipt of remuneration in aggregate of more than Rs.1,02,00,000/- if employed throughout the year or Rs.8,50,000/- per month if employed for part of the year.

Details of top 10 employees based on their salary are disclosed in Annexure-VIII.

Listing

The Equity Shares of the Company are listed in BSE Limited and the Company has duly paid the Annual listing fees for the year 2023-2024

M/s. Cameo Corporate Services Limited, Chennai is the Registrar for providing depository services through National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for holding Shares in Electronic mode (De-mat) of our Shareholders and also is the Registrar for Share Transfer Services for physical segment.

Compliance with Secretarial Standards

The Company has complied with applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

Acknowledgements

Your Directors wish to place on record their deep sense of appreciation for the tremendous support from the Bankers M/s. Indian Overseas Bank, the shareholders, and all our suppliers and customers. The Board also wishes to place on record their appreciation for the contribution made by the employees at all levels.

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Jun 30, 2014

Dear Members,

The Directors are hereby presenting this 34th Annual Report together with the Audited Statement of Accounts for the Year ended 30th June,2014.

FINANCIAL RESULTS FOR THE YEAR

The financial results for the year under review are furnished below:

Particulars 30.06.2014 30.06.2013

Profit before Interest and Depreciation 13,75,26,303 13,98,33,855

Interest -6,19,13,960 -6,49,39,149

Depreciation -3,98,42,234 -3,94,27,398

Profit before tax 3,57,70,109 3,54,67,308

Tax expense:

Deferred Tax (Liability) / Asset -90,10,145 -2,99,823

Excess income tax provision reversed - 2,69,152

Income tax paid for prior year -6,68,501 -

Profit transferred to Balance Sheet 2,60,91,463 3,54,36,637

Dividend : Due to inadequacy of Profit, the Company is unable to declare any Dividend for the year 2013-14.

REVIEW OF OPERATIONS

The Company turned around during the current year with a Net Profit before tax being Rs. 357.70 lakhs as compared to Net Profit before tax being Rs. 354.67 lakhs during the year 2012-13.

During the current year, the company is expected to improve its performance.

FIXED DEPOSITS : Your Company has not accepted any fixed deposit from public, after 01.04.2014, in accordance with the New Companies Act, 2013.

NEW COMPANIES ACT, 2013

The Ministry of Corporate Affairs has replaced the erstwhile Companies Act, 1956, with the new Companies Act, 2013.

DIRECTORS : As per Section 149 and other applicable provisions of the Companies Act, 2013 and Clause 49 (ii) of the Listing Agreement, appointment of Independent Directors is required.

The Companies Act, 2013 ("the Act") provides for appointment of Independent Directors. Sub-section (10) of Section 149 of the Act (effective from April 1st, 2014) provides that an Independent Director shall hold office for a term up to five (5) consecutive years on the Board of the Company.

The tenure of office of Shri P.Palaniappan, Chairman cum Managing Director and Smt. PUmayal, Joint Managing Director expires on 18th December, 2014. The Board of Directors, at their meeting held on 21st August, 2014, re-appointed them as Chairman cum Managing Director and Joint Managing Director of the Company respectively for a period of five (5) consecutive years effective from 19.12.2014 to 18.12.2019. Their appointment and remuneration are being placed before you at the ensuing Annual General Meeting for your consideration and approval.

Smt. RM. Umaiyal, Director is liable to retire by rotation and is eligible for re-appointment. Smt. Vasantha, was appointed as an Additional Director of the Company with effect from 21.08.2014.

A brief resume, expertise, shareholding in the company and details of other entities in which the Directors are interested as stipulated under Clause 49 of the Listing Agreement entered with the Stock Exchange, form part of the Notice of the ensuing Annual General Meeting.

All the Directors of the Company have confirmed that they are not disqualified from being appointed as directors as required by the Companies Act.

DIRECTORS RESPONSIBILITY STSTEMENT

As per Section 217(2AA) of the Companies Act, 1956, the Board of Directors states that in the preparation of Annual Accounts for the year ended 30.06.2014:

1. That the applicable accounting standards have been followed and there are no material departures.

2. That the Directors have selected such accounting policies in consultation with the statutory auditors and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company for the financial year ended 30.06.2014 and of the PROFIT of the Company for that year.

3. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. That the Directors have prepared the Annual Accounts for the year ended 30.06.2014 on a going concern basis.

CORPORATE GOVERNANCE

Reports on Management Discussion and Analysis and Corporate Governance along with a certificate from the auditors of the Company regarding compliance in accordance with Clause 49 of the Listing Agreement with Stock Exchange are annexed as part of the Annual Report.

LISTING

The Equity Shares of the Company are listed in Mumbai Stock Exchange and the Company has duly paid the Annual listing fees for the year 2014-15.

M/s. Cameo Corporate Services Limited, Chennai is the Registrar for providing depository services through National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL), for holding Shares in Electronic mode (De-mat) of our Shareholders and is also the Registrar for Share Transfer Services for physical segment.

AUDITORS

M/s. M.S. Jagannathan & Visvanathan, Auditors retire at the ensuing Annual General Meeting and they are eligible for reappointment.

PARTICULARS OF EMPLOYEES

In accordance with Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules 1975, as amended, there are no employees who are in receipt of remuneration of Rs. 60 lakhs or more per annum and Rs.5 lakhs or more per month.

STATEMENT SHOWING DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, EXPORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO

In accordance with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules 1988, a Statement showing details of conservation of Energy, Technology absorption, Exports and Foreign Exchange earning and outgo is annexed to this report.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their deep sense of appreciation for the tremendous support from the Bankers M/s. Indian Overseas Bank, the shareholders, and all our suppliers and customers. The Board also wishes to place on record their appreciation for the contribution made by the employees at all levels.

Selam By Order of the Board, 21st August, 2014 P.Palaniappan, Chairman cum Managing Director,

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Jun 30, 2013

The Director are Hereby presenting 33rd Annual Report together with Audit Statent of Account For the Year anded 31th june 2013

FINANCIAL RESULTS FOR THE YEAR

The Financeal resuts the year under review are funsihed below

Fartlcutars 30.06.2013 30.06.2012

Interst 13.98.33.855 1.47.88.586

Depreoanon

before tax

Tax expense: 15,975

Excess incogs Tax vision reversed

Profit transferred to Balance Sheet

Dividend Rrofil the Company is unable to declare any tor be year 2012-13.

a Thece was a sustained demand Eor cotton yam during the last year. b Increase In capacity utiiizaUon due fa reduction o

b. Timely coverage of good cotton at

During he company is expend to Improve its perfe measures and improved

FIXED DEPOSITS: No Fixed Deposit remained unclaimed as on 30.05.2013.

DIRECTORSRESPONSIBIUTYSTATEMENT

per Httrrtd Section 21W of tfe Compel Act, U& Ihs BOffd of preparation of Annual Accounts for the year ended 30.05.2013,'' oilier irregularities, have prepared the A,oual Aaaunts for antfal 30.08.2013 on a QBnfl concern basis.

CORPORATEGOVERNANCE

Reports on Management Discussion and Analysis and Caspar ate Co vernanoe along wiih a certificate horn ihe auditor of the Company regaling compliance in accordance with Clause-49 of (be Listing Agreement with Slock Exchange arc annexed as pari of the Annua! Report.

LISTING

The Equity Sh fines of (he Company sre listed in M umbai Stecf^ Exchange an d 1 ha Company has du ly paid |ho Annual tisflng fees for Ihe year 201344.

Mfo Cameo Corporate Services Limited, Chennai is Ihe Regislrar for providing depositary services Ihrotjgh National Securities Depository Limited (MSD L} and Central Depository Services (I ndia} Limited (C DSL) for holding Shares in Electronic mode (De< ma t) by 0ur Shareholders and also Registrar for Share Transfer Services for physical segmenl,

AUDITORS

Auditors rellreai the ensuing Annual General Meolingand lliey are eligible for re-appoinlnieiil. costajditors

The Board of Director has reappointed Shri V. Balasubramanian, CoeE Accountants, Coimbatore as (li e Cost Auditors of the Company u nder Section 233B of the Companies Ad, 1556, for the year 2013-14. The Cost Audilors Report for the year ended 30* June, 2012. (he due dato of ftl Inrj the Cos! Audit Report was 31" Ja nua ry, 2013, and the actual dale of f iting (he cost audit report was 31.01.2013,

PARTICULARS OF EMPLOYEES

In accordance with Section 217{2A) of the Companies Act, 1955, read wffh Companies (Particulars of Employees) Rutos 1375, as amended, there are no employees who are in receipt of remuneration of Rs.SO lakhs or more per annum and Rs,5 lakhs or more perrnonlh.

STATEMENT SHOWING DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, EXPORTS AND FOREfGN EXCHANGE EARNINGS AND OUTGO

in aorordonce wiih Ihe Com panics {Disclosure of particulars in Ihe Report of the Board of Directors) Rules 19&) a Statement showing details of Conservation of Energy, Tech notagv absorption, Exports and Foreign Exchange earning and outgo is annexed to this report.

ACKNOWLEDGEMENTS

Your Directors wish to place on record ihefr deep sense of appreciation for the tromsidous suppori from (he Bankers Mfe. Indian '' Ovemeas Benk, thfr shareholders, doposllors, all our suppliers and cuslDrnors. The Board also wishes (o place on record lliolr appreciation tho conlribu lion m ade by the employees at all levels.

For and on behalf of the Board of Directors Salem PPALARJIAPPAN

22nd Augusl, 2013 Chairman cum Managing Director

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Jun 30, 2012

TO THE SHAREHOLDERS

The Directors are hereby presenting this 32nd Annual Report together with the Audited Statement of Accounts for the Year ended 30th June, 2012.

FINANCIAL RESULTS FOR THE YEAR

The financial results for Hie year under review are furnished betow:



Particulars 30.06.2812 30.06.2011

Profit before Interest and Depreciation 1,80,50,726 7,90,21,945

Interest (8,69,59,551) (7.18,26,960)

Depreciation (3,71,54,977) (3,17,66,492)

Loss before tax (10,60,63,802) (2,45,71,507)

Tax expense:

Current Tax (MAT) - 51,94,388

MAT credit entitlement - (51,94,388)

Deferred Tax (Liability)/Asset 2,86,15,975 (89,69,095)

Excess income tax provision reversed - 9,64,088

Loss transferred to Balance Sheet (7,74,47,827) 3,25,76,514



Dividend: Due to inadequacy of Profit, the Company is unable to declare any Dividend for the year 2011-12

REVIEW OF OPERATIONS

The disparity between the cotton prices and yarn prices prevailed for most part of the year leading to huge losses in the year under review. With the RBI continuing its policy of increasing interest rates, there was a sharp increase in financing costs. Energy costs continued to remain high in view of the critical power situation ftat prevailed trough the financial year. Salaries and wages continued to escalate in line with increased demand for human capital and increases in tfie cost of Swig. AM these factors added to the pressure on the bottom line. Hence resulting in a loss of Rs. 774.48 lakhs.

FIXED DEPOSITS: No Fixed Deposit remained unclaimed as on 30.06.2012.

DIRECTORS

The Directors Shri S. Ravichandran and Shri PL. Subbiah retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The details as required under Clause 49 of the Listing Agreement is attached.

Shri Amarthlal A. Gandhi, tendered his resignation from directorship due to his ill health on 15.102011.

The Board expresses its appreciation for the services rendered by Shri Amarthlal A. Gandhi during his tenure as director towards the growth of the Company.

The Particulars of the Directors proposed to be appointed or re-appointed are given in the Report on Corporate Governance of this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT:

As per amended Section 217(2AA) of the Companies Act, 1956, the Board of Directors states that in the preparation of Annual Accounts forthe year ended 30.06.2012

1. That the applicable accounting standards have been followed and there are no material departures.

2. That the Directors have selected such accounting policies in consultation with the statutory auditors and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company atthe end of the financial year ended 30.06.2012and of the Loss of the Company for that year.

3. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4 That the Directors have prepared the Annual Accounts for the year ended 30.06.2012 on a going concern basis.

CORPORATE GOVERNANCE

Reports on Management Discussion and Analysis and Corporate Governance along with a certificate from the auditors of the Company regarding compliance in accordance with Clause 49 of the Listing Agreements with Stock Exchanges are annexed as part of the Annual Report.

LISTING : The Equity Shares of the Company are listed in Mumbai and Coimbatore Stock Exchanges and the Company has duly paid the Annual listing fees for the year 2012-2013, except to Coimbatore Stock Exchange to which the Company has applied for de-listing on 22.08.2005.

M/s. Cameo Corporate Services Limited, Chennai is the Registrar for providing depository services through National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for holding Shares in Electronic mode (De-mat) by our Shareholders and also RegistrarforShareTransferServicesforphysical segment.

EROSION OF NET WORTHS THE REASON FOR THE EROSION

The year 2011-12 was a very tough year for the textile industry. Our Company was also affected and it resulted in 50% erosion of peak net worth Of the Company calculated in accordance with Section 23 of the Sick Industrial Companies (Special Provisions) Act, 1985. The reasons for erosion are as follows.

a. The disparity between cotton prices and yam prices prevailed during the year under review which led to losses.

b. The demand for yarn had dropped significantly due to slowdown in the US, the economic crisis in Europe and uncertain domestic and world economic scenario.'

c. The power situation had deteriorated in Tamil Nadu. There were 12 hours power shedding, 2 days power holidays per week and 40% demand cut for HTIine industries. Hence, energy costs perkg of yam had gone up significantly.

d. The financing costs had gone up significantly because of RBI poiicyon bankrates.

STEPS TAKEN FOR IMPROVEMENT:

The Promoters converted their Unsecured loans amounting to Rs. 15 Crores into Preference Shares Capital by issuing 10% Cumulative Redeemable Preference Shares to improve the Net worth of the Company.

The Cotton prices have since stabilized and the yarn markets are also significantly improving. This will help the Company to fetch better prices.

Further, due to reduction in unsecured loans the finance costs will also come down.

REPORTING TOWFR:

Due to erosion of 50% of peak net worth during the immediately preceding four financial years, calculated in accordance with Section 23 of the Sick Industrial Companies (Special Provisions) Act, 1985, the Company has to report such erosion to the Board for Industrial and Financial Reconstruction and the Company will take steps to report the same within the time stipulated.

AUDITORS : M/s. M.S.Jagannathan & Visvanathan, Auditors retire at the ensuing Annual General Meeting and they are eligible for reappointment.

COST AUDITORS: The Board of Directors has re-appointed Shri V. Balasubramanian, Cost Accountant, Coimbatore as the Cost Auditors of the Company under Section 233B of the Companies Act, 1956, for the year 2012-13. The Cost Auditors Report for the year ended 30" June, 2011, the due date of filing the Cost Audit Report was 31" December, 2011, and the actual date of filing the cost audit report was 24.12.2011.

PARTICULARS OF EMPLOYEES : In accordance with Section 217(2A-of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules 1975, as amended, there are no employees who are in receipt of remuneration of Rs.60 lakhs or more peranrtum and Rs.5 lakhs or more per month.

STATEMENT SHOWING DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, EXPORTS AND FOREIGN

EXCHANGECARNINGS AND OUTGO

In accordance with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules 1988 a Statement showing details of conservation of Energy, Technology absorption, Exports and Foreign Exchange earning and outgo is annexed to this report.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their deep sense of appreciation for the tremendous support from the Bankers M/s. Indian Overseas -Bank, the shareholders, depositors, all our suppliers and customers. The Board also wishes to place on record their appreciation for the contribution made by the employees at all levels.

For and on behalf of the Board of Directors,

Salem, P.PALANIAPPAN,

23rd August, 2012. Chairman cum Managing Director.

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Jun 30, 2010

The Directors are hereby presenting this 30th Annual Report together with the Audited Statement of Accounts for the Year ended 30th June, 2010.

FINANCIAL RESULTS FOR THE YEAR

The financial results for the year under review are furnished below: 30.06.2010 30.06.2009

Rs. Rs.

OPERATING PROFIT BEFORE INTEREST 13,04,06,733 2,09,51,772 AND DEPRECIATION

Less: Interest 4,65,89,107 4,33,68,567

Depreciation 2,16,74,134 1,98,31,057

6,82,63,241 6,31,99,624

PROFIT/(LOSS) BEFORE TAX 6,21,43,492 (4,22,47,852)

Less: Deferred Tax (Liability) / Asset (1,05,15,176) 1,55,06,507

Fringe Benefit Tax for prior year -- (54,219)

PROFIT/(LOSS) AFTER TAX 5,16,28,316 (2,67,95,564)

lncrease/(Provision for Diminution) in Value of investments 3,13,500 (2,64,248)

Less/(Add) Loss Brought forward (5,81,68,245) (39,108,433)

Less: Transfer from General Reserve -- 8,000,000

Balance of Loss Carried Forward (62,26,429) (5,81,68,245)

Dividend: Due to inadequacy of Profit, the Company is unable to recommend any Dividend for this year 2009-10 and the situation is expected to improve in the current year,

REVIEW OF OPERATIONS

The Company turned around during the current year with Net profit before tax being Rs. 621.43 lakhs as compared to Net loss before tax being Rs. 422.48 lakhs during the year2008-09,The profit during the year was onaccount of the following factors,

a. There was a sustained demand for cotton yarn during the last year at higher price levels world wide.

b. Increase in capacity utilisation due to reduction of power cut.

c. Timely coverage of good cotton at lower prices.

d. Additional spindleage in our Aunit from 27840 to 33600 spindles.

During the current year, the company is expected to improve its performance by enhanced production with a reduction in power cut from 30 % to 20%, energy conservation measures, improved yarn prices and positive signs of revival of the current world economy, coupled with the full utilization of additional spindleage.

FIXED DEPOSITS : As on 30.06.2010, three deposits amounting to Rs.33,000/- remaining unclaimed on the due dates and since paid.

DIRECTORS

The Directors Sri. Perumal Madhavagopal and Sri A.AIagappan retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.The details as required under Clause 49 of the Listing Agreements attached.

Sri.A. Annamalai was appointed as Whole Time Director with effect from 01,09.2010.

Sri. S. Ravichandran and Sri. PL. Subbiah were appointed as Additional Directors with effect from 27.08.2010.

The Particulars of the Directors proposed to be appointed or re-appointed are given in the Report on Corporate

Governance of this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

As per amended section 217(2AA) of the Companies Act, 1956, the Board of Directors states that in the preparation of

Annual Accounts for the year ended 30.06.2010

1. That the applicable accounting standards have been followed and there are no material departures.

2. That the Directors have selected such accounting policies in consultation with the statutory auditors and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 30.06.2010 and of the Profit of the Company for that year.

3. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. That the Directors have prepared the Annual Accounts for the year ended 30.06.2010 on a going concern basis.

CORPORATE GOVERNANCE

Reports on Management Discussion and Analysis and Corporate Governance along with a certificate from the auditors of the Company regarding compliance in accordance with Clause 49 of the Listing Agreements with Stock Exchanges are annexed as part of the Annual Report.

LISTING : The Equity Shares of the Company are listed in Mumbai and Coimbatore Stock Exchanges and the Company has duly paid the Annual listing fees for the year 2010-2011, except to Coimbatore Stock Exchange to which the Company has applied for de-listing on 22.08.2005.

M/s. Cameo Corporate Services Limited, Chennai is the Registrar for providing depository services through National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for holding Shares in Electronic mode (De-mat) by our Shareholders and also Registrator Share Transfer Services for physical segment.

AUDITORS : M/s. M.S.Jagannathan & Visvanathan, Auditors retire at the ensuing Annual General Meeting and they are eligible for reappointment.

PARTICULARS OF EMPLOYEES: In accordance with Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules 1975, as amended, there are no employees who are in receipt of remuneration of Rs. 24 lakhs or more per annum and Rs.2 lakhs or more per month.

STATEMENT SHOWING DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, EXPORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO

In accordance with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules 1988 a Statement showing details of conservation of Energy, Technology absorption. Exports and Foreign Exchange earning and outgo is annexed to this report.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their deep sense of appreciation for the tremendous support from the Bankers M/s. Indian Overseas Bank, the shareholders, depositors, all our suppliers and customers. The Board also wishes to place on record their appreciation for the contribution made by the employees at all levels.

For and on behalf of the Board of Directors Salem, R PALANIAPPAN

27th August, 2010. Chairman cum Managing Director

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Jun 30, 2009

The Directors are hereby presenting this 29 Annual Report together with the Audited Statement of Accounts for the Year ended 30th June,2009.

FINANCIAL RESULTS FOR THE YEAR

The financial results for the year under review are furnished below:

30.06.2009 30.06.2008 Rs. Rs.

OPERATING PROFIT BEFORE INTEREST 2,20,65,805 3,86,01,660 AND DEPRECIATION

Less: Interest 4,33,68,567 4,55,95,760

GROSS LOSS 2,13,02,762 69,94,100

Add: Depreciation 1,98,31,057 1,98,82,215

LOSS BEFORE TAX (4,11,33,819) (2,68,76,315)

Deferred Tax Asset/(Liability) 1,55,06,507 1,21,00,672

Fringe Benefit Tax (38,299) (59,671)

Fringe Benefit Tax for prior year (15,920) (5,350)

Excess Income Tax provision reversed -- 1,06,000

LOSS AFTER TAX (2,56,81,531) (1,47,34,664)

Bonus and Exgratia for Prior year (11,14,033) (13,81,380)

Dimunition in value of investments (2,64,248) (49,252)

Deficit transferred to Balance Sheet (2,70,59,812) (1,61,65,296)

REVIEW OF OPERATIONS

During the year under review, the turnover of the Company decreased by 3.70%. Gross Loss before depreciation increased from Rs 69.94 lakhs to Rs.213.02 lakhs. The loss was on account of the following factors.

? Shortage of power and erratic power supply in Tamilnadu resulting in under utilisation of the plant and also higher costs due to usage of captive power plants.

? Lower price realisation and slow movement of yarn due to global meltdown.

? Higher raw material input costs due to minimum support price of cotton being enhanced by 40% during the year and also higher price of imported cotton due to appreciation of dollar versus the rupee.

During the current year, the company is expected to improve its performance by enhanced production with a reduction in power cut from 40 % to 20%, energy conservation measures, improved yarn prices and positive signs of revival of the current world economy.

FIXED DEPOSITS : As on 30.06.2009, one deposit amounting to Rs. 3,000/- remaining unclaimed on the due dates and close follow up is being made to obtain instruction from the depositor.

DIRECTORS

The Directors Smt. RM. Umaiyal and Shri. A. Annamalai retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. The details as required under Clause 49 of the Listing Agreement is attached. The Particulars of the Director proposed to be appointed or re-appointed are given in the Report on Corporate Governance of this Annual Report.

DIRECTORS RESPONSIBILITY STATEMENT:

As per amended section 217(2AA) of the Companies Act, 1956, the Board of Directors states that in the preparation of Annual Accounts for the year ended 30.06.2009

1. That the applicable accounting standards have been followed and there are no material departures.

2. That the Directors have selected such accounting policies in consultation with the statutory auditors and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year ended 30.06.2009 and of the loss of the Company for that year.

3. That the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. That the Directors have prepared the Annual Accounts for the year ended 30.06.2009 on a going concern basis.

CORPORATE GOVERNANCE

Reports on Management Discussion and Analysis and Corporate Governance along with a certificate from the auditors of the Company regarding compliance in accordance with Clause 49 of the Listing Agreements with Stock Exchanges are annexed as part of the Annual Report.

LISTING : The Equity Shares of the Company are listed in Mumbai and Coimbatore Stock Exchanges and the Company has duly paid the Annual listing fees for the year 2009-2010, except to Coimbatore Stock Exchange to which the Company has applied for de-listing on 22.08.2005.

M/s.Cameo Corporate Services Limited, Chennai is the Registrar for providing depository services through National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited (CDSL) for holding Shares in Electronic mode (De-mat) by our Shareholders and also Registrarfor Share Transfer Services for physical segment.

AUDITORS : M/s. M.S.Jagannathan & Visvanathan, Auditors retire at the ensuing Annual General Meeting and they are eligiblefor reappointment.

PARTICULARS OF EMPLOYEES : In accordance with Section 217(2A) of the Companies Act, 1956, read with Companies (Particulars of Employees) Rules 1975, as amended, there are no employees who are in receipt of remuneration of Rs.24 lakhs or more per annum and Rs.2 lakhs or more per month.

STATEMENT SHOWING DETAILS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, EXPORTS AND FOREIGN EXCHANGE EARNINGS AND OUTGO

In accordance with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules 1988 a Statement showing details of conservation of Energy, Technology absorption, Exports and Foreign Exchange earning and outgo is annexed to this report.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their deep sense of appreciation for the tremendous support from the Bankers M/s. Indian Overseas Bank, the shareholders, depositors, all our suppliers and customers. The Board also wishes to place on record their appreciation for the contribution made by the employees at all levels.

For and on behalf of the Board of Directors, Salem, P. PALANIAPPAN

24th August, 2009 Chairman cum Managing Director